April 29, 2019 / 8:10 AM / a month ago

Czech PM says government to debate bank tax

PRAGUE, April 29 (Reuters) - The Czech government will debate introducing sector taxes on banks, insurers and mobile operators and whether this would harm consumers, Prime Minister Andrej Babis said.

With economic growth predicted to slow, the government has started looking for new revenue streams as the central European country’s public finances are expected to fall back into deficit for the first time since 2015 from next year.

The junior coalition partner, the Social Democrats (CSSD), have pushed for a sector tax on banks, although Babis and his ANO party have long opposed such a move as they say it could hit consumers with higher fees.

However Babis, in a report broadcast on Czech Television on Sunday evening, said the cabinet would debate the issue.

He said the debate would be to see “whether, if we do the sector tax for banks, it will have such impact on everybody via more expensive loans and their accessibility, or not.”

Czech banks earned a combined net profit of 82.1 billion crowns ($3.57 billion) in 2018, up 9 percent year-on-year. They are mostly foreign-owned and have been strong profit drivers for their western parents.

Czech Television reported the government would also consider an extra tax on insurers and mobile operators.

Babis’s government has taken aim at mobile operators in recent years over mobile data prices that rank among the highest in the European Union.

It has backed an auction of new-generation 5G frequencies due later thi s year that will seek to bring a fourth operator to the country to boost competition against incumbents O2 Czech Republic, T-Mobile and Vodafone . ($1 = 23.0180 Czech crowns) (Reporting by Robert Muller; Editing by Toby Chopra)

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